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UOB KayHian upgrades First Resources (EB5.SG) to Buy from Hold, raises target to $1.62 from $1.40. Says, company one of fastest-growing pure CPO producers in Southeast Asia, with over 116,000 hectares under management (25.1% CAGR since 1992).
Expects earnings to rise on higher CPO prices, recovering yields; “We have already begun to see a recovery in the Group’s fresh fruit bunch (FFB) production with a stark increase (+16.5% on-year) in 3Q10 due to the estate’s young tree age,” yields will pick up in 2011, 2012.
Adds, expectation of higher CPO ASPs due to tight demand-supply situation (raises CPO ASP forecasts for both 2011, 2012 to MYR2,650/ton from MYR2,500/ton) will also spur earnings, while FR expected to continue with aggressive new planting in Kalimantan.
Expects earnings to rise on higher CPO prices, recovering yields; “We have already begun to see a recovery in the Group’s fresh fruit bunch (FFB) production with a stark increase (+16.5% on-year) in 3Q10 due to the estate’s young tree age,” yields will pick up in 2011, 2012.
Adds, expectation of higher CPO ASPs due to tight demand-supply situation (raises CPO ASP forecasts for both 2011, 2012 to MYR2,650/ton from MYR2,500/ton) will also spur earnings, while FR expected to continue with aggressive new planting in Kalimantan.
Shares +0.7% at $1.41.
